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Uber has been stripped of its license to operate in one of its most important cities, London. The city's transportation agency says Uber put passengers at risk through a pattern of failures. The decision is another big blow for the company in what has already been a difficult year. NPR's tech correspondent Shannon Bond reports.
SHANNON BOND, BYLINE: London is one of Uber's biggest markets. It's one of five cities around the world where the ride-hailing company takes in a quarter of its fares from customers.
DANIEL IVES: London's the heart and lungs of its European operations, biggest city in Europe.
BOND: Daniel Ives is an analyst at Wedbush Securities. By his estimate, the British capital accounts for 3- to 5% of Uber's total ride-hailing sales. But that's now at risk of vanishing.
Transport for London, the city's transit agency, says it won't renew the license Uber needs to run its car service there. The British agency says Uber doesn't meet its standard of being a, quote, "fit and proper" company. The agency says unauthorized drivers manipulated Uber systems to upload their own photos to other drivers' accounts. That resulted in 14,000 uninsured trips where passengers had no idea their driver had not been vetted by Uber. In at least one case, a driver whose license had been revoked was still able to drive for Uber.
Uber says it has fixed the flaw that allowed this to happen. It says it's introducing facial matching in London to confirm drivers' identities. But Uber has had safety issues for years as it has raced to grow quickly.
Ives, the analyst, says the British agency's action against Uber reflects a big problem.
IVES: Safety is the lifeblood of Uber. If consumers don't feel safe within the platform, there's much broader issues.
BOND: For Uber, what's at risk is not just the money it makes in London. It's the precedent that could be followed by other big cities.
Bradley Tusk is a former adviser to Uber who helped the company fight regulations in New York in its early days. He still owns Uber shares.
BRADLEY TUSK: For a company that's already struggling financially, this is yet another difficult blow. But beyond that, London is one of the most widely seen cities in the world, and what happens in London is noticed everywhere.
BOND: The London license denial is just the latest black eye for Uber this year. For example, the company has had to limit how many drivers it has in New York after losing a legal battle with the city. Uber is already losing billions of dollars a year, and its stock price has fallen sharply from when the company started trading publicly in May.
Ives, the analyst, says it's tough to be an Uber shareholder.
IVES: Since the IPO, it's really been a horror movie. And I think this is something that investors are starting to get more and more frustrated with the company, and this latest London issue is another overhang now over the Uber stock.
BOND: Uber says it will appeal the decision. In the meantime, its 45,000 London drivers will still be picking up passengers while the company fights to stay in the city.
Shannon Bond, NPR News. Transcript provided by NPR, Copyright NPR.